the five api monetization models - rob zazueta, restfest 2016

The Five API Monetization Models Rob Zazueta Global Director Digital Strategy TIBCO

@rzazueta

The success of an API program is measured by how well it moves a

business toward its goals.

© Copyright 2000-2016 TIBCO Software Inc. 4

API Business Models by Company

Source: API Business Models by John Musser: http://www.slideshare.net/jmusser/j-musser-apibizmodels2013

© Copyright 2000-2016 TIBCO Software Inc.

1.  Charge Directly for Your API

2.  Use API Access as an Upsell Opportunity

3.  Drive Revenue-Generating Activities Through Your API

4.  Generate Revenue and Increase Distribution Through Strategic Partner Integrations

5.  Improve Operational Efficiency and Decrease Time to Market for Internal Teams

5

The Five Models For API Monetization

1. Charge Directly For Your API – Either By Call Volume or Subscription

ARPU =

Measure the Average Revenue Per API User

Total Revenue ------------------

Number of Users

2. Use API Access As An Upsell Opportunity

•  Compare sales of packages including the API against sales of other packages without the API.

•  Ensure the sales person marks the customer’s level of interest in the API at the time of sale.

•  Measure the number of calls made by API enabled packages to determine whether it’s a factor in the sale of that package.

•  Measure ARPU of active API customers against non-active API customers.

How to Measure Success

3. Drive Revenue-Generating Activities

Through Your API

•  Properly attribute revenue generating activities to the apps that drove them using API keys.

•  Follow the complete chain of application usage – many apps may lead to a single revenue recognition.

•  Not all calls directly lead to revenue – measure ARPU against API usage.

How to Measure Success

4. Generate Revenue and Increase Distribution

Through Strategic Partners / Affiliates

•  Carefully plan with your partners how success will be measured.

•  For affiliates – pay only for directly-related revenue generating activities.

•  Measure new customers brought in through partners / affiliates.

•  Measure the ARPU of new customers brought in through partners / affiliates vs. ARPU of other customers and total ARPU.

How to Measure Success

5. Improve Operational Efficiency and Decrease

Time to Market For Internal Projects

• “Comcast went from about four weeks’ lead time to just a few hours to onboard partners.”

-  Hai Thai Senior Engineer, Comcast

•  Review old project plans – measure average time from inception to completion.

•  Review existing provisioning processes. Measure the amount of employee time and actual time taken to completion.

•  Seek new ways to decrease these numbers not only through APIs, but through other efficient processes.

How to Measure Success

Flickr Image “Lego Bricks” by Benjamin Esham

Thank You! Rob Zazueta @rzazueta